commercial real estate · Malls · Office Properties · Retail leases · Shopping Center · Uncategorized

Considering the proper treatment of tax abatements and incentives in your leases

I have the honor of serving on our city’s development authority. It is a recent appointment, so I cannot take any credit for the great things that have been done already. As part of the appointment, I was required to take a class that included a couple of hours on tax incentives and bond financings.… Continue reading Considering the proper treatment of tax abatements and incentives in your leases

commercial real estate · Malls · Retail leases · Shopping Center · Uncategorized

How do YOU determine the value of a negotiated exception to a lease?

Any change made to a lease has a value to one of the parties. Some have very straightforward calculable values – reducing minimum rent from $25/sf to $24/sf or changing the percentage rent rate from 6% to 5%. Others have an absolute calculable value, but take a little effort to determine that value – changing… Continue reading How do YOU determine the value of a negotiated exception to a lease?

commercial real estate · Malls · Office Properties · Retail leases · Shopping Center · Uncategorized

CAM, tax and insurance reconciliations during due diligence

More often than not, when acquiring a property or portfolio, prospective purchasers are focused on future cash flows. When it comes to CAM, taxes and insurance, it is future reconciliations that will have the most impact on the buyer’s cash flow. However, when acquiring a property, it is critical to get as many years of… Continue reading CAM, tax and insurance reconciliations during due diligence

commercial real estate · Uncategorized

The physical embodiment of the last real estate recession is now gone … and it is kind of sad.

(A little non-lease administration but still real estate related blog for this week) Having been in retail real estate since 1987, I have seen my shares of ups and downs. However, in the early through mid 2000s, transaction volumes were through the roof, and I had forgotten the rule about what goes up also goes… Continue reading The physical embodiment of the last real estate recession is now gone … and it is kind of sad.

Malls · Retail leases · Shopping Center

Consider the facts behind the stories

As a company, we spend our time making sense of the cash flows presented by sellers. Find where the seller may have overstated the cash flow. Find where they had missed opportunities. Basically, sort out the facts. There were a couple of articles this week that made their way around Twitter an LinkedIn because they… Continue reading Consider the facts behind the stories

Malls · Office Properties · Retail leases · Shopping Center · Uncategorized

Poof! A $40m value swing because of lease language.

In prior posts, we have addressed why there are excluded areas defined for purposes of calculating prorata shares of taxes or CAM. In a nutshell, if a part of a property is not paying a full prorata share of expenses, any shortfall has to be absorbed by the landlord. For example, we have a fully… Continue reading Poof! A $40m value swing because of lease language.

Malls · Office Properties · Retail leases · Shopping Center · Uncategorized

Don’t overcomplicate the lease language

Every few weeks, someone in the office will let out a scream of frustration. The frustration comes from reading lease language that is so involved, but could have been accomplished with incredibly simple lease language. For example, it is fairly common to see Consumer Price Index (CPI) increases applied to rents, or used as caps… Continue reading Don’t overcomplicate the lease language

Malls · Office Properties · Retail leases · Shopping Center · Uncategorized

Negotiate your leases wisely!

In any given year, we (my company, Meridian Realty Consultants) will read and abstract 8-10,000 leases. We get to see what landlords and tenants spend their time negotiating. It is not uncommon for someone in the office to say, “Can you believe someone took the time to negotiate this?” It might be something as simple… Continue reading Negotiate your leases wisely!